TIDMKDNC
RNS Number : 8584A
Cadence Minerals PLC
26 May 2023
Cadence Minerals Plc
("Cadence Minerals", "Cadence", or "the Company")
Amapa Project Update & Loan Financing
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to
announce an update on the Amapá Iron Ore Project ("Amapá") and the
completion of a Mezzanine Loan Facility ("Loan Facility"), which
will be applied to the Amapá project.
Highlights
Ø Savings of approximately US$28 million were identified on port
refurbishment costs at Amapá.
Ø Cadence has agreed US$ 2 million Loan Facility ("First
Tranche") that has been arranged by Riverfort Global Capital Ltd to
be entered into by RiverFort Global Opportunities PCC Ltd and YA II
PN, Ltd (the "Investors"). The Loan Facility allows a further US$ 8
million to be drawn down over the next three years, subject to
agreement by the Investors.
Ø The net proceeds from Loan Facility will be used to continue
the development of the Amapá Project, including optimisation
studies on the processing route and environmental licensing.
Ø Continued investment into Amapá Project will increase the
Company's stake to circa 33%.
Ø The term of the Loan Facility is two years, with a 6-month
principal repayment holiday. The annual interest rate that Cadence
will pay is 9.5%.
Ø The principal and interest of the Loan Facility are payable in
cash. However, the Company can elect not to pay any outstanding
principle or accrued interest of the Loan Facility in cash ,
granting the Investors the right to convert these outstanding
amounts into ordinary shares.
Amapá Project Port Studies
On 1 March, we announced that a scoping level study had been
completed to improve the capital cost associated with the port
refurbishment of the Amapá's wholly owned port. We have now
reviewed how these changes can be integrated into the original
Pre-Feasibility Study ("PFS"), published in January this year, and
have identified that a potential net capital saving to the port
refurbishment costs of US$28 million or circa 24% of the direct
capital expenditure associated with the port refurbishment.
The savings were derived by moving the current rail loop, which
is used for unloading iron ore at the port so that it is one
hundred metres further inshore. The change in the location of the
railway loop reduces the load on the ground near the shore and
negates the installation of a substantial retaining wall. This
change in the rail loop will also require a reorientation of the
on-shore iron-ore storage and loading system. The net of these two
capital items is anticipated to result in a net capital saving of
US$28 million. These results will need to be confirmed once the
project advances with further geotechnical investigations.
Details of the Mezzanine Loan Facility
The Mezzanine Loan Facility ("Loan Facility") involves an
unconditional and committed initial tranche by the Investors of US$
2 million and a further conditional Loan Facility amount of US$ 8
million, subject to agreement by the Investors. The Loan Facility
is valid for three years.
The First Tranche of US$ 2 million has a 24-month term
("Maturity Date"). It has a six-month principal repayment holiday,
followed by 18 equal monthly cash repayments thereafter to the
Maturity Date. The Loan Facility has an effective annual interest
rate of 9.5% and has a 5% implementation on the value of the First
Tranche.
If the Company elects not to settle a monthly payment in cash
(each being a "Missed Payment"), they will automatically grant a
right for the Missed Payment to be settled in shares as per the
non-cash repayment terms contained in the Loan Facility Agreement
("Non-Cash Repayment"). Following a Non-Cash Repayment, the
Investors will be automatically granted conversion rights over such
principal and interest balances due concerning the Missed Payment.
The Investors will then have the right for 12 months to convert
such amounts either at a price equal to 12.7 pence (representing a
30% premium to the closing price on 25/05/2023) or at a 7% discount
to the average of the five daily VWAPs chosen by the Investors in
the 20 trading days preceding its conversion notice or at the price
the Company issues further equity if lower than the existing
conversion price.
Cadence has provided a security package to the Investors as part
of the Loan Facility. This package includes a floating charge over
the Company's investments, placing its holding in European Metals
Holdings into escrow and the issue of new ordinary shares to the
Investors ("Initial Issued Shares"). The Initial Issued Shares
represent 50% of the value of the First Tranche, or 8,251,224 new
ordinary shares. These initial Issued Shares will be used as part
of any Non-Cash Repayments if applicable. On the Maturity Date, the
Company can utilise the Initial Issued Shares to pursue its
investment strategy or for working capital purposes. If it has
settled all amounts in cash and these Initial Issued Shares revert
to the Company.
As part of the Loan Facility, the Company has agreed to grant
8,251,224 warrants to subscribe for ordinary shares in the Company
at an exercise price of 13.2 pence (representing roughly a 35% per
cent premium to the current share price of the Company's Shares)
with a 48-month term.
The application will be made for the 8,251,224 Initial -Issued
Shares to be admitted to trading on the AIM market of London Stock
Exchange plc and to the AQSE Growth Market operated by Aquis
Exchange Plc ("Admission"), and this is expected to become
effective on or about 5 June 2023. On Admission, the Pre-Issued
Shares will rank pari passu with all existing ordinary Shares in
the Company.
Following Admission, the Company will have 180,971,037 Shares in
issue, with each Share carrying the right to one vote. There are no
Shares currently held in treasury. The total number of voting
rights in the Company is, therefore, 180,971,037. This figure may
be used by shareholders as the denominator for the calculations by
which they determine if they are required to notify their interest
in, or a change to their interest in, the Company under the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority.
For further information contact:
Cadence Minerals plc +44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
Darshan Patel
Enzo Aliaj
Brand Communications +44 (0) 7976 431608
Public & Investor Relations
Alan Green
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the
information contained in this announcement. Kiran holds a Bachelor
of Engineering (Industrial Geology) from the Camborne School of
Mines and an MBA (Finance) from CASS Business School.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be deemed to
be forward-looking statements. Forward-looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should", "envisage", "estimate", "intend", "may", "plan",
"will", or the negative of those variations or comparable
expressions including references to assumptions. These
forward-looking statements are not based on historical facts but
rather on the Directors' current expectations and assumptions
regarding the Company's future growth results of operations
performance , future capital, and other expenditures (including the
amount, nature, and sources of funding thereof) competitive
advantages business prospects and opportunities. Such
forward-looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors. Many factors could cause actual results to differ
materially from the results discussed in the forward-looking
statements, including risks associated with vulnerability to
general economic and business conditions, competition,
environmental and other regulatory changes actions by governmental
authorities, the availability of capital markets reliance on key
personnel uninsured and underinsured losses and other factors many
of which are beyond the control of the Company. Although any
forward-looking statements contained in this announcement are based
upon what the Directors believe to be reasonable assumptions. The
Company cannot assure investors that actual results will be
consistent with such forward-looking statements.
The information contained within this announcement is deemed by
the Company to constitute Inside Information as stipulated under
the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part
of U.K. domestic law under the European Union (Withdrawal) Act
2018, as amended. Upon the publication of this announcement via a
regulatory information service, this information is considered to
be in the public domain.
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